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Flashcards in 1 Deck (28):
1

Business objectives

Profit

Growth

Survival

2

Legal structure

Public sector business owned and run by the government e.g nhs

Private sector:

Sole trader: individual own business, less than 30 employees unlimited liability

Partnership more than one individual take ownership of organisation. Unlimited liability

LTD - small organisation shares privately to selected individuals. limited liability

PLC - shares sold through public via stock market. Limited liability

3

Marketing

Finding needs and wants of customers

4

Market objectives

Increase market share
Market growth
Brand loyalty
Sales volume and value

5

Sources of finance

Internal: retained profits, debt factoring


External: overdraft, loan, share capital and venture capital

6

Organisational design

Hierarchy (business structure - each level has responsibility)

Tall (long chain of command) affects communication/decisions
Flat advantages: empowerment
Disadvantages: too overwhelmed (too many people reporting them)
Centralisation and de-centralisation

7

Span of control

Number of people who report directly to manager

8

Centralised

Advantages

9

Delayering

Altering structure (removes layer of hierarchy)

Advantages: lowers cost (salaries)

Disadvantages: stress managers

10

Quality control

Detect errors and fix them before consumers buy them

11

Quality assurance

Employees check own work

Aim (create culture of zero defects)

12

Two types of technology

Robotic engineering - robots as part o manufacturing proceeds

Computer technology (product development, business communications and finance department heavily reliant on IT systems)

13

Advantages / disadvantages of capital labour

Reduces costs long term
More accuracy
Reliable

----
Redundancy (expensive)
High initial cost
Maintenance can be expensive

14

Types of marketing

Niche - sell to smaller more specific group (target)
Advantages: good chance buy product
Less money on marketing (focus)

Disadvantages: forced to set price high
Expensive (identifying)

Mass- many customers as possible
Advantages: reach large audience
Save money (EOS - economies of scale) - allowing firms to be competitive

Disadvantages: Doesn't meet exact needs
Marketing is expensive (promotions etc.)--

15

Monopoly

Market which has one organisation providing product / service

Advantages: doesn't worry too much about marketing

Disadvantages: government intervention. (Massive market share) due to exploitation and use of resources inefficiently

16

Pricing strategies

Skimming - new/ innovative products sold at high price. Customers pay more because of scarcity value.

Advantages: protects products by using patents and trademarks

Penetration - launch product at low price

Adavantages: gain customers
Market share
Benefit from EOS

17

Recruitment

Internal ( work in business)
Advantages: know candidates (understand objectives)
Motivates (promotion, job security)

Disad: promotion for vacancy
External (outside of company e.g agency)
Adavantages: fresh idea.
Skill and experience
Large pool of applicants

Disad: long and expensive process

18

Centralised structure

Decisions made by those top of hierarchy.

Advantages: consistent policies (uniformity)
Quick decisions (don't need to consult all branches)
Identical (customers know what to
expect)

Disad: managers at local branch (better knowledge about needs/wants of customers)
Lack of empowerment (affect motivation)

19

Decentralised structure

Power/authority to make decisions are delegated to local branches (lower down in hierarchy structure)

Advantages: empowerment (leads to innovation)
Promotions (target more accurately to meet needs/wants

Disad: reduction of uniformity
Focus too much on local issues ignore bigger picture

20

Lean production

Production based on time and waste saving measures.
Cut waste = reduced costs

E.g

Overproduction (too much stock)
Waiting time
Defects

21

CSR

Based on concept of interdependence of business and society

Society needs business : jobs and wages
Investment and innovation
Profits

Business needs society: create demand
Legal protection
Public assets and infrastructure

22

Extrapolation

Predict future data by relying on historical data.

E.g forecast sales by past trends in sales

23

HRM

soft - employees as important resource


hard - employees as resources
Minimum wage
Little empowerment

24

Economies of scale

Unit costs fall as output increases

25

Diseconomies of scale

Unit costs rise as output rises

26

External growth

Takeovers, merges, joint venture and strategic alliance

Takeover: Shareholders in AGM vote leader as unfit. One business takes control of another business

Merger: mutual decision both companies combine and become one equity( new business created)
E.g T-Mobile and orange = EE

Joint venture: business arrangement with two or more business and sharing pool of resources to accomplish task

27

Direction of integration

Vertical:
Forward: acquire business further up supply chain
Backwards acquire business operating earlier in supply chain
Horizontal : acquiring business at same stage (competitor)
Conglomerate- no clear connection (diversification

28

Synergy

Combined power of organisation working together is greater than the power achieved working individually